Korean Air knocks back price-fixing deal
SYDNEY – Korean Air refused to divulge details of its alleged cartel-like freight deals with other airlines in return for a 20 per cent discount on penalties that Australia’s competition regulator was threatening to impose, a court heard yesterday.
Details of the settlement offer, which Korean Air rejected because it believed it was “unreasonable”, were revealed as part of the carrier’s attempts to stop the Australian Competition and Consumer Commission (ACCC) from gaining documents via its investigation powers because the regulator had already decided to prosecute.
The Sydney Morning Herald said the case has shed further light on the regulator’s long-running investigation into dozens of airlines for alleged involvement in an illegal global air freight cartel.
The legal tussle in the Federal Court also comes as an estimated 30 or so airlines are subjected to one of the world’s biggest anti-cartel investigations by US and European authorities.
The airline argued that before it was issued with a subpoena in November, the regulator had already decided to pursue legal proceedings for alleged breaches of the Trade Practices Act.
Under cross-examination, the head of the ACCC’s enforcement division, Mark Pearson, said the intention of the long-running investigation was to ascertain whether any airlines had contravened the Trade Practices Act.
He said the regulator was still investigating alleged contraventions of the law and was still to decide whether to launch legal proceedings against Korean Air.
Justice Peter Jacobson reserved his decision.
Ian Jarrett
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